Survey Issues at Closing: How Ontario Real Estate Deals Navigate Boundary Problems

A real property survey is one of the most useful — and most frequently misunderstood — documents in a residential real estate transaction. When it shows what the buyer hoped to see, it receives little attention. When it reveals a discrepancy, it can unravel a deal, delay closing, and require lawyers on both sides to work overtime to find a solution.

Survey issues in Ontario real estate range from minor matters that title insurance resolves in minutes to serious boundary problems requiring an Ontario Land Surveyor, an encroachment agreement, or even a municipal process to fix. This article explains the most common survey-related complications and how they are typically handled.

What Is a Real Property Survey?

In Ontario, a real property survey (more formally, a Building Location Survey or a Reference Plan prepared by a licensed Ontario Land Surveyor) shows:

• The registered lot boundaries
• The location of existing structures relative to those boundaries
• The setbacks from property lines
• Fences, driveways, and other physical features relative to boundaries
• Any encroachments (structures crossing the boundary line)

A survey is not the same as a property appraisal or a home inspection. It measures physical location relative to legal description, not value or physical condition.

Common Survey Issues That Arise at Closing

1. No Current Survey Exists

Many Ontario residential properties — particularly urban infill lots, older semis, and attached townhomes — have surveys that are decades old or have no survey at all. A 30-year-old survey predates additions, new fences, rebuilt garages, and driveway extensions. It does not reflect the current physical reality.

When a buyer's lawyer asks for a survey and none exists (or only an outdated one is available), the options are:

Option A — Obtain a new survey. The seller obtains a current Building Location Survey from a licensed Ontario Land Surveyor. This takes time (typically several weeks, depending on demand and season) and costs money. The question of who pays is negotiable.

Option B — Title insurance in lieu of survey. The buyer accepts title insurance as a substitute for a new survey. The title insurer accepts the risk of survey-related issues (encroachments, setback violations) without requiring a physical survey to be prepared. This is by far the more common outcome for residential closings in Ontario today.

2. Structures Violating Setback Requirements

A survey may reveal that a structure — an addition, a garage, a shed — was built too close to the property line, violating the zoning bylaw setback requirements in force at the time of construction (or today). This is sometimes called a "minor variance" issue.

Severity depends on:

• Whether the bylaw violation was ever permitted or legalized (a minor variance may have been granted)
• Whether the municipality is likely to enforce (older violations are less frequently targeted)
• Whether the title insurer will cover the risk

Most title insurers will cover existing bylaw violations for structures that are already in place, provided the violation was not the subject of an outstanding work order. Coverage for new construction or material expansions is different.

3. Encroachments (Structures on the Wrong Side of the Line)

As discussed in more detail in our encroachments article, a survey may show that the seller's structure extends onto a neighbouring property — or that a neighbour's structure extends onto the property being sold. Encroachments may require:

• A formal encroachment agreement registered on title
• Removal of the offending structure
• A lot-line adjustment involving both owners and a Reference Plan

Title insurance may cover the buyer's risk from the encroachment but does not resolve the physical fact of the encroachment.

4. Discrepancy Between Legal Description and Physical Boundaries

The registered legal description defines the lot on paper. The physical lot may differ slightly from the description because of historical surveying errors, road widenings, or changes in adjacent lots. Your lawyer and Ontario Land Surveyor can advise whether the discrepancy is within acceptable survey tolerances or requires formal correction.

5. Easements and Rights of Way Visible on Survey

A survey may show a hydro corridor, a utility line, or access path crossing the property that does not appear on the registered title. These should be investigated: they may correspond to registered easements, statutory rights, or unregistered interests that the buyer should understand before closing.

Who Pays for a Survey?

Ontario purchase and sale agreements (typically on the OREA standard form) address the survey question. Common outcomes:

• Seller provides existing survey if available (with a buyer's warranty exception for changes since the date of survey)
• Buyer waives survey and takes title insurance instead
• New survey cost is negotiated between the parties, sometimes shared

If the agreement is silent and no current survey is available, the parties must negotiate. In a hot market, buyers often waive the survey and rely on title insurance. In complex transactions — large lots, unusual boundaries, acreage, or rural properties — a survey is much more important.

When Title Insurance Is and Is Not Enough

Title insurance works well for the most common urban residential survey issues: minor encroachments, setback violations, and absence of a current survey. It is a financial safety net.

Title insurance is less satisfying when:

• A buyer needs to know the exact boundaries before planning construction or subdivision
• The property involves significant acreage where boundary location affects value materially
• A discrepancy is so significant that a lender refuses to advance without a survey
• The encroachment is so serious (entire structure on wrong land) that physical resolution is necessary regardless of insurance

Frequently asked questions